Outlook and Targets

Please read our caution about Forward-Looking Statements in the Conditions of Use when using this information.

Future Perspectives

(published on February 27, 2020 in the Annual Report 2019)

Economic Outlook

Corporate Outlook
The following forecast is based on the current business development and our internal planning. It also proceeds from the assumption that our Animal Health business will transfer to the acquirer effective July 1, 2020, and that we will receive the purchase price on that date in cash and Elanco shares as agreed.

To enhance the comparability of operating performance, the forecasts are adjusted for currency effects1. A 1% appreciation (depreciation) of the euro against all other currencies would decrease (increase) sales on an annual basis by some €350 million and EBITDA before special items by about €100 million.

We adjusted our value flows as of January 1, 2020 (for further details see A 1.1.2 “Corporate Structure”), which has an impact on the divisions’ EBITDA before special items. If these value flows had already applied in 2019, this key indicator would have been as follows:

Pro-forma EBITDA Before Special Items After Value Flow Changes

in Mio. €Crop SciencePharmaceuticalsConsumer Health
EBITDA before special items24,7965,9751,090
Value flow changes(82)(114)51
Pro-forma EBITDA before special items after value flow changes4,7145,8611,141

1 Using the average monthly exchange rates from 2019 (see Annual Report 2019, table B 4/1)
2 For definition see Annual Report 2019, A 2.3 “Alternative Performance Measures Used by the Bayer Group.”

 

For 2020, we expect currency-adjusted sales from continuing operations to amount to around €44 billion to €45 billion. This corresponds to an increase of about 3% to 4% on a currency- and portfolio-adjusted basis. We aim to increase the EBITDA margin before special items to around 28% on a currency-adjusted basis. Based on the aforementioned sales figure, this would correspond to EBITDA before special items of €12.3 billion to €12.6 billion on a currency-adjusted basis. We plan to raise core earnings per share to between €7.00 and €7.20 on a currencyadjusted basis.

Forecast for 2020

2019 figures 2020 forecast
€ billion Fx & p adj. Change (%) € billion

Fx & p adj. Change (%)

Sales1 43.5 + 3.5 44 to 45+ 3 to 4
Crop Science 19.8 + 1.4 ~+ 4

Pharmaceuticals

18.0 + 5.6 + 3 to 4

Consumer Health

5.5 + 2.6 + 2 to 3
Margin (%) Margin (%)
EBITDA before special items1 (pro forma) 11.5 26.4 ~28
Crop Science 4.8 (4.7) 24.2 (23.8) ~26

Pharmaceuticals

6.0 (5.9) 33.3 (32.6) ~33

Consumer Health

1.1 (1.1) 20.0 (20.9) 22 to 23
Financial result (core)2 (1.6) ~( 1.5)
Tax rate (core)3 22.5% ~23%
Free cash flow1 4.2 ~5
Net financial debt1 34.1 ~27
Special items in EBITDA (1.9) ~( 0.9)
Core EPS1 6.40 7.00 to 7.20

Fx & p adj. = currency- and portfolio-adjusted
1 For definition see Annual Report 2019, A 2.3 “Alternative Performance Measures Used by the Bayer Group.”
2 Financial result before special items
3 (Income taxes + special items in income taxes + tax effects on adjustments) / (core EBIT + financial result + special items in financial result)

 

We plan to take total special charges of about €0.9 billion (currency-adjusted) in 2020, of which we expect approximately €0.7 billion to be spent on restructuring.

Potential estimation risks regarding special charges in connection with litigations are referenced in A 3.2 Opportunity and Risk Report.

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